Focus on refis, not first-timers

Focus on refis, not first-timers

Instead of focusing on first-time buyers, CAAMP should push Ottawa on refinancing restrictions, says one industry vet, reacting to news the association has now tailored its lobby efforts.

“From what I hear from other brokers, they haven’t done a refinance in ages,” says Ian McSevney, president of lender Altmore Mortgage Investment Corp. “We as brokers are not just a transactional provider for first-time buyers; we offer financial advice. And right now, people need to refinance their homes to improve their cash flow and save for retirement.”

Finance Minister Jim Flaherty appeared to offer a don’t-call-us-we’ll-call-you rebuff following a meeting with CAAMP CEO Jim Murphy where the association head again asked for an easing of restrictions for first-time home buyers. He cited the upcoming spring sales season as needing a helping hand to lift itself out of the doldrums.

“I’m not an economist, but they (Ottawa) have done something right,” admits McSevney, a CAAMP member, on the rules concerning first-time buyers. “But CAAMP needs to have Flaherty revisit the refis.”

Murphy told Flaherty that last year’s measures have “gone too far” in cooling the market, and urged that a return to 30-year mortgages and an increase of the tax incentive for first-time home buyers be put in place to spur the spring sales season. The current incentive is $750.

“The spring months are the most important months for new sales and re-sales,” said Murphy.

Flaherty’s office declined to comment following the meeting, but did state it was “unlikely” that there will be any rule changes.

Murphy points to the stiffer lending guidelines as having made it too difficult for young people to enter the housing market at a time when prices remain high.

“I’m not sure what Murphy is trying to do on the benchmark for first-time buyers,” McSevney told MortgageBrokerNews.ca. “Really, we are only back to where it was in 2005-2006.

“What I want is to go back to 85 or 90 per cent on the LTVs," he says. "The 80 per cent benchmark has taken a huge toll on my business.”